The US techlash is real

For most of this century, tech companies in the US have mostly been given a free pass to do what they want. They have taken full advantage of that freedom to build some of the biggest and most profitable businesses in history that have transformed our world, for better and worse. The Trump administration, in particular, has largely disavowed federal regulation and let the market rip. But it is now becoming increasingly clear that public opinion, the US courts and Congress are turning against Big Tech. The techlash is for real.

Perhaps the most telling change is that public opinion has grown fearful of the technology that underpins the extraordinary US stock market surge. According to the latest poll from the Pew Research Centre, 40 per cent of US adults say AI will have a negative impact on society over the next 20 years. Only 16 per cent expect it to be positive.

As Meta’s chief executive Mark Zuckerberg wrote in a recent essay on AI, if industry leaders keep warning that the technology will automate away jobs and may even threaten humanity, it is no surprise that people are anxious. That concern has led to public resistance to the building of the giant data centres needed to run AI. Even Texas, which had been actively courting tech companies, has frozen approvals of data centre projects pending an audit.

Public pressure has also encouraged politicians to push AI-related bills in all 50 US states, with 146 acts being passed in 2025. This legislation ranges widely from child safety, privacy and deepfakes to algorithmic bias. Goaded by the big tech companies, the Trump administration attempted to impose a 10-year moratorium on all state AI legislation to prevent an unhelpful patchwork of regulations. But in a rare display of bipartisanship, Congress rebuffed that move. It is now even pushing federal AI-related legislation of its own, most recently on surveillance pricing, even though the White House may shoot down such initiatives.

The US courts are also adopting a tougher approach. US regulators had previously attempted to pursue antitrust cases against the big tech companies, albeit with little success. Even when Google was found in 2024 to be operating an “illegal monopoly”, the court refrained from imposing any really punitive remedies.

But this week opening arguments began in a landmark trial in a federal courtroom in Oakland, California. Some 29 US states are suing Meta over allegations that its Facebook and Instagram platforms designed addictive features that harmed children’s mental health, and violated children’s privacy. Meta has denied all charges.

Two recent rulings have already signalled a change in the climate. Earlier this month, a New Mexico court fined Meta a total of $942mn and ordered it to improve its safety practices to protect children. Lawyers expect a flood of similar litigation in other states, even if Meta is appealing against the ruling.

In California, a judge also ruled that engagement-based algorithms were not protected under the freedom of speech rights enshrined in the First Amendment, as the tech companies have long claimed. If upheld, this ruling would ensure state legislation aiming to protect children from social media addiction could be enforced, with big implications for how all social networks are run.

Rather than fighting rearguard court actions, tech companies would be best advised to heed the changing political and legal mood. They should redouble their efforts to run safer, privacy-preserving services that demonstrably serve the public interest as well as consumers’ needs. In their own self-interest, tech company shareholders, who have for so long discounted all regulatory concerns, should cajole them to do so.